Imperial Brands: A Dog Waiting For Its Day

The chart of Imperial Brands is somewhat reminiscent of the slow, sliding pattern seen on the Shire chart before it was “saved” by Takeda, The main difference here is that rather than £30 being the bargain basement zone, we have £25. The other big technical point to note is that on the retest of the lows this month there was a bear trap rebound accompanied by very sharp bullish divergence, kind of the price action equivalent of a handbrake turn.

The lasting floor idea is backed by the way that over the past couple of sessions there has been a sharp rise in volume on the buy side. While it has to be admitted that this stock is fundamentally out of favour, and has been a dog for years, there may be at least an intermediate rebound worth talking about. The area between 2,800p and the 200 day line is favoured over the next month. Ideally, there is no break back below the March support line at 2,400p in the interim. One is too jaded to mention M&A after so many false dawns. Instead, it would be nice just to not have to talk about the stock anymore!